QUESTION 1:-
What do you understand about the Concept of Break Retest Break Strategy? Give Chart Examples from Crypto Assets.
ANSWER 1:-
BRB Stands for Break Reset Break. It is nothing but a trading strategy used by many traders. We all are familiar with the concept of support and resistance. These two are the lines from where prices generally bounce back to reverse the trend. Many of us think that price is unable to break resistance and support but this is not true. So to trade in the region where price break resistance and support we use a strategy name as Break Reset Break trading strategy. This technique is quite easy to understand as it only consists of 3 main points Break, Reset and support/resistance level. One can easily take entry and exit by looking at these points.
Many traders think that resistance and support are the points present at the highest price or lowest price points. But this is not true, the thing is that resistance and support only bounce back the price chart so it can be present at any point from top to middle anywhere.
There are two methods to trade using BRB, that are :
Break Reset Break using Resistance level
Break Reset Break using Support level
Let us discuss both of them one by one by taking small examples from trading charts.
Break Reset Break using Resistance level
When price break the resistance level and create a swing high just after that it will again move towards the resistance line and reset the resistance line and then create a next swing high which is now more than the previous swing high. So this is how we can use BRB with resistance level. This situation is used by traders to buy the asset.
On 10th July 2021 l, We found a Situation in which we can see the break out of resistance level and after that price once again move towards resistance line and reset it. After resistance break, price trend creates a swing high and after reset, next swing high is more than previous swing high. So this situation is of Break Reset Break Trading Strategy for Resistance line.
Break Reset Break using Support level
When price break the support level and create a swing low just after that it will again move towards the support line and reset the support line and then create a next swing low which is now lower than the previous swing low. So this is how we can use BRB with a support level. This situation is used by traders to sell the asset.
On 26th February 2021 l, We found a Situation in which we can see the break out of support level and after that price once again move towards support line and reset it. After support break, the price trend creates a swing low and after reset, the next swing low is lower than the previous swing low. So this situation is of Break Reset Break Trading strategy for Support line.
So this is the basic information about Break Reset Break Strategy in both Resistance and Support levels
QUESTION 2:-
Mark important levels on crypto charts to trade BRB strategy. Do it for both buy and sell.
ANSWER 2:-
As we discuss above that there are two methods to trade using BRB that are resistance level and support level BRB. Both have their working and also provide different entry-exit points.
As we discussed above there are three main points or levels that are fixed in both resistance and support level cases. These are 2 breaks, Reset point and swing point. These three are fixed points to determine BRB.
Now let us see one by one these points for both Buy and sell conditions.
Buy condition:-
Buy conditions take place when the price trend break out the resistance line. I have marked all the points in the BTCUSD chart. So in this situation, there are points or levels named as:
Resistance Level: It is a level from where the trend which is moving uptrend start moving downtrend after bounce back the price from the resistance line.
Break: Break is the point where price trends move above the resistance level and break that level. In this strategy, there are two breaks. One is for resistance level and the other is for swing point.
Swing point: The point on the price chart after breaking the resistance level that is above the resistance level where the price moves towards the resistance line are known as the swing point. In a buy situation, this point is a swing high.
Reset: The point on the price chart which hit the resistance line and bounce back to make a new swing high after the resistance line breakout is known as a reset point. This point reset the resistance line and then create a situation to buy trade and enter the market.
Sell condition:-
sell condition take place when the price trend breaks out the support line. I have marked all the points in the BTCUSD chart. So in this situation, there are points or levels named as:
Support Level: It is a level from where the price trend which is moving downtrend start moving uptrend after bounce back from the Support line.
Break: Break is the point where the price trend moves below the support level and break that level. In this strategy, there are two breaks. One is for a support level and the other is for a swing point.
Swing point: The point on the price chart after breaking the support level that is below the support level where the price moves towards the support line again are known as the swing point. In a sell situation, this point is a swing low.
Reset: The point on the price chart which hit the support line and bounce back to make a new swing low after the support line breakout is known as a reset point. This point reset the support line and then create a situation to sell trade and move out of the market.
So these are the important levels that are present in both buy and sell conditions of the BRB trading strategy. For both these conditions, I have mentioned the same chart BTCUSD
QUESTION 3:-
Explain Trade Entry and Exit Criteria for both buy and sell position on any crypto-asset using any timeframe of your choice.
Answer 3:-
Let us try to explain Break Reset Break trading strategy entry and exit in both buy and sell situations.
Entry in trade:
One can take entry in market in both situation that is for buy or for sell also. Let us both situation one by one.
Entry Trade for Buy position
To create a buy situation using BRB, first, we have to take a resistance level and then we have to follow basic steps to find that buy point easily.
Create a resistance level of your choice which means it is not required to make resistance at the extreme. But yes market should move toward it.
Now wait till the price trend break the resistance level and create a good swing high point above the resistance break.
Now after swing high check for reset of resistance level that means price move towards resistance level and bounce back to an uptrend.
Now check for the swing high, it's time for the price to creating a swing high more than the previous swing high.
Now to take buy entry, check the point just above the swing high break line. It will be your buy point to enter into the market.
Now let us take an example to make our buy entry more clear.
For example:
From 9th to 10th july 2021, A situation is created in which we can see that price is hitting our middle resistance line and then around 8pm on 9th it break out the resistance line. Because of this break there is a creation of swing high and then on 10th this swing high first get reset and then after break the swing high and create a new swing high which is more than the previous swing high. So just after swing high break we will take entry and buy our trade. So here by buy our BTCUSD trade some where above $33714.54 as our swing break at this level.
Entry Trade for Sell position
To create a sell situation using BRB, first, we have to take a support level and then we have to follow certain basic steps to find that selling point easily.
Create a support level of your choice which means it is not required to make support at the extreme. But yes market should move toward it.
Now wait till the price trend break the support level and create a good swing low point below the support break.
Now after swing low check for reset of support level that means price move towards support level and bounce back to downtrend.
Now check for the swing low, it's time for the price to creating a swing low lower than the previous swing low.
Now to take sell entry, check the point just below the swing low break line. It will be your sell point to enter the market.
Now let us take an example to make our sell entry more clear.
For example
In between 24th to 26th February 2021, there is a creation of situation in which we can see price is moving by taking support from 24th to 26th February morning. But soon price breakout the support level and move downward. This down movement create a swing low point below support line. Around 9:30am on 26th February 2021, price try to create a reset point again and again move down and this time price break the swing low level and create a new swing low below the previous swing low. So just after the break of swing low we have to sell our trade. So in this BTCUSD situation we have to sell trade in somewhere around below $45975.52 as this is our swing break point.
Exit from trade:
Exit from trade can only take place, whether you are in profit or in huge loss. To make perfect profit loss exit we use two levels
stop loss
take profit
Now let us see how to use these two in both buy and sell situation.
Exit Trade for Buy position
To exit from market during buy position we have to follow simple steps shown below.
After entry if our transaction/trading goes in wrong path then it is good to use stop loss to secure our trade from huge loss.
This stop loss level should be below the buy trade and hover near the reset resistance level.
If price move towards stop loss or hit stop loss then our trade become weak and then we have to wait for next better trade condition.
To apply take profit one must use 1:1 risk:reward condition. It simply means that the point of take profit and stop loss should have a ratio of 1:1.
Put take profit above buy position anywhere in same ratio to that of stop loss. That is 1:1. When your price move and hit to take profit you can enjoy your trade and take exit out.
For example:
In same BTCUSD chart in between 9th-10th july 2021 we buy our trade but we have to secure ourself from loss. So we have to create a 1:1 Risk:Reward. In this chart we put stop loss just below our buy entry near resistance level and we put our take profit near second swing high and both these stop loss and take profit are in the ratio 1:1. So if our price it stop loss our trade become in valid or if it hit take profit then it will become profitable to take exit from market.
Exit Trade for Sell position
To exit from market during sell position we have to follow simple steps shown below.
After entry if our transaction/trading goes in wrong path then it is good to use stop loss to secure our trade from huge loss.
This stop loss level should be above the sell trade and hover near the reset support level.
If price move towards stop loss or hit stop loss then our trade become weak and then we have to wait for next better trade condition.
To apply take profit one must use 1:1 risk:reward condition. It simply means that the point of take profit and stop loss should have a ratio of 1:1.
Put take profit below sell position anywhere in same ratio to that of stop loss. That is 1:1. When your price move and hit to take profit you can enjoy your trade and take exit out.
For example:
In same BTCUSD chart in between 24th-26th February 2021 we get a situation to sell our asset. But we have to secure ourself from loss and for that we have to use take profit and stop loss in the same ratio that is 1:1. So we apply stop loss near our support level where price reset and apply take profit below sell trade near the swing low. If your trade hit stop loss then trade become weak and we have to wait for next trade, so we can take exit otherwise if our trade hit take profit then you can enjoy profit and take exit from market.
So these are the four methods to take entry in the market and exit from market. Its only the support and resistance that should be marked correct then you can easily find the buy and sell position
QUESTION 4:-
Place 2 demo trades on crypto assets using BRB strategy. Use can use lower timeframe for these demo trades.
ANSWER 4:-
For Demo trades using Break Reset Break trading strategy we are using
ETHUSD
BTCUSD
The time frame which we are selecting is one minute because it is already mentioned in question that we can choose small time frame.
BUYING ETHUSD DEMO TRADE 1 :-
After waiting for hours from 23:00pm to 00:45am we finally achieve a buy situation as per the the break reset break trading strategy. Starting from 0:45am we achieve a resistance level from where price bounce back several times. Till 1:30am we achieve the same and soon at 1:45am price break the resistance level and then reset it and move above resistance line. After 1st swing high we achieve our second swing high above the previous swing high and just above our swing break we buy 1000 asset of ETH USD at $1945.92 on 14th july 2021 at 02:22 am.
BUYING BTCUSD DEMO TRADE 2:-
SAVE_20210714_141421.jpg
In morning after waiting for more than 4 hours i finally achieve another buy point in BTCUSD chart around 13:20pm as per the the break reset break trading strategy. Starting from 11:50am we achieve a resistance level from where price bounce back several times. Till 13:00pm we achieve the same and soon at 13:05pm price break the resistance level and then reset it and move above resistance line. After 1st swing high we achieve our second swing high above the previous swing high and just above our swing break we buy 6 asset of BTC USD at $31996.13 on 14th july 2021 at 13:21pm.
Conclusion
Now it's time to conclude our homework post in which we discuss about break reset break trading strategy which is basically depend on two levels that is Resistance level and support level. These are the levels from where price bounce back and move in reverse direction. But when the price brake resistance or support line then we use break reset break trading strategy. This trading style help to create easy entry and exit point. Every break reset break strategy graph consists of four main points that are 2 break points, Resistance/support level, reset point and swing point. All these points must be present there while applying this is strategy. There are in total four method to take entry and exit from the market and while taking the exit from the market we have to make sure that we put stop loss and take profit in correct order. For our understanding we are using 1 ratio 1 risk reward that stop loss and take profit must be equal distance from buying or selling position. Finally we applied to demo trades in which we achieve break reset break strategy in 1 minute time frame and complete our homework task.